Chainalysis has investigated 32 of the largest Bitcoin wallets to research whether the large investors are cause for price volatility.

The study followed an article released by Bloomberg, which reported rumors that a $2 billion USD investor (or Bitcoin whale) had sent Bitcoin into a 15% down-surge by selling off more than 50,000 BTC tokens over the course of a month.

Through a thorough investigation into Bitcoin’s 32 largest wallets, Chainalysis revealed that the rumors and fears are unfounded. The report states:

“Our data demonstrates that Bitcoin whales are a diverse group, and only about a third of them are active traders. And while these trading whales certainly have the capability of executing transactions large enough to move the market, they have, on net, traded against the herd, buying on price declines.”

During the study, the research firm analyzed the wallets and separated them into four different categories:

  • Traders – Nine wallets controlling 332,000 tokens (valued at just over $2 billion USD). This group showed a high trading rate.
  • Miners/Early Adopters – Fifteen wallets also controlling 332,000 tokens. This group saw extremely low-trading activity.
  • Lost – Five wallets making up 212,000 tokens (valued at approximately $1.3 billion USD). Users have lost private keys and therefore, the wallets have had no trading activity since 2011.
  • Criminals – Three wallets accounting for 25,000 tokens (valued at just less than $790 million USD). Two wallets allegedly connected to the Silk Road darknet market with one involved in money-laundering.

When investigating whether these different wallets were allowing major declines in the market, after conducting research into the impact the wallets had on the market Chainalysis offered:

“That net activity demonstrates that trading whales were not selling off Bitcoin in any mass amount, but rather were net receivers of Bitcoin from exchanges in late 2016 and 2017. This indicates that trading whales were, in aggregate, buying on declines and, consequently, were a stabilizing, rather than destabilizing factor in the market.